Apple’s Stock Down 8% Since Reaching All-Time High Last Month

Apple shares are currently trading for around $143 after Monday's opening bell, around 3.5 percent lower than Friday's closing price of $148.98.

Apple CEO Tim Cook at the company's Worldwide Developers Conference last week

Apple's stock has dropped around 8 percent since reaching an all-time high of $156.10 on May 12, amid a wider downturn in the stock market. Technology stocks have been hit particularly hard, as some investors fear that stocks like Facebook, Amazon, Netflix, and Alphabet in particular rose too quickly.

Japanese bank Mizuho downgraded Apple to a "hold" rating today, as analyst Abhey Lamba believes enthusiasm around the company's upcoming product cycle is "fully captured" at current levels, with limited upside to estimates from here on out. The bank slashed its AAPL price target to $150, down from $160.

Andy Hargreaves, equity research analyst at Pacific Crest Securities, also downgraded Apple's stock last week. In a research note distributed to clients, he said excitement surrounding the so-called "iPhone 8" appeared to be "priced in," compounded by risks such as the potential for gross margin pressure.

Wall Street analyst Brian White of Drexel Hamilton believes otherwise, calling the recent dip in Apple's stock price another buying opportunity.

"In our view, Friday's sell-off in Apple represents yet another buying opportunity as investors turn their focus to the iPhone 8 this fall, along with the company's raised capital distribution initiative, depressed valuation, and new innovations," said White, in a research note distributed to clients on Monday.

"We continue to believe Apple remains among the most underappreciated stocks in the world," he added.

White said Apple shouldn't be compared to the likes of Facebook, Amazon, Netflix, and Google, jointly called FANG, as the iPhone maker's stock has significantly underperformed against its rivals over the past five years.

"For example, the average 'FANG' stock is up 674 percent over the past five years compared to a 100 percent increase for Apple and a 84 percent rise for the S&P 500 Index," said White, in a note obtained by MacRumors. "Even Microsoft has outperformed Apple with a 175 percent increase during this time."

White said Apple has "demonstrated resilience" through its "unique ability" to develop hardware, software, and services that work seamlessly together, despite seemingly never-ending concerns that the iPhone maker will fall victim to the missteps of consumer electronic companies of the past.


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Apple’s Stock Price Dips Ahead of WWDC as Analyst Issues Rare Downgrade

Apple shares are trading around 1 percent lower today, just ahead of WWDC 2017, after one analyst issued a rare downgrade of the stock.
"We are downgrading AAPL to Sector Weight and recommend investors reduce position sizes," said Andy Hargreaves, equity research analyst at Pacific Crest Securities, in a note to clients. "We believe AAPL anticipates strong performance in the iPhone 8 cycle, while providing relatively little weight to risks through the cycle or the potential for iPhone sales to decline in fiscal 2019."
Wall Street remains largely upbeat about Apple's stock heading into the second half of this year, as investors anticipate the so-called "iPhone 8" to be a hit among customers, but Hargreaves believes the stock has limited upside, as he said hype surrounding the hotly-anticipated device appears to be "priced in."

Hargreaves anticipates the upside of the iPhone 8 to be offset by key risks, including the "potential for gross margin pressure, diminishing value of the mobile operating system, and the likelihood for declines in iPhone unit sales beyond the iPhone 8 cycle due to market saturation and elongating."

Hargreaves also believes iPhone sales will likely resume declining in 2019, as the iPhone 8 will result in above-average sales in 2018 that are unlikely to be matched once Apple returns to a normalized upgrade rate, similar to what happened after pent-up demand for the larger-screened iPhone 6 started to fade.

AAPL was trading at $153.85 at the time of publication, after opening at $154.34, but remains only slightly off its all-time high.


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Bullish Analyst Says Apple Has Potential to Become Trillion Dollar Company Within 18 Months

Apple has the potential to become a trillion dollar company by 2019, according to RBC Capital Markets analyst Amit Daryanani.

In a research note on Monday, Daryanani said Apple could reach or exceed a trillion dollar market cap within the next 12 to 18 months.

An excerpt from Daryanani's research note, edited slightly for clarity:
In aggregate, we see a scenario where in the 2019 fiscal year, Apple sustains $12+ earnings per share and, assuming the valuation frameworks remains stable/improves, it should get AAPL stock toward $192–$195, which would equate to a market cap above $1 trillion.
Daryanani believes the so-called "iPhone 8" and the upgrade supercycle it's expected to drive will be a major catalyst towards Apple's path to a trillion dollar valuation. Looking further ahead, he thinks there is potential for Apple to continue growing its Services category revenue by double digits year over year.
Longer-term, we think there is potential for Apple to continue growing Services revenue by double digit year-over-year given the company's expanding installed base [of devices], increasing App Store sales within the current installed base, demand for cloud storage/compute services, and further adoption of Apple Pay.
Apple's Services category brought in $7.17 billion last quarter, from $6 billion in the year-ago quarter, representing 18 percent year-over-year growth. Apple CEO Tim Cook said the Services category is already the size of a Fortune 100 company, with hopes to double the category's revenue by 2020.

Earlier this month, Apple's market cap surpassed the $800 billion mark for the first time ever as the company's shares traded above $153. RBC has raised its Apple stock price target to $168, up from $157, given the upside it anticipates from the iPhone 8 and increasing services-related revenue.

Wall Street analyst Brian White also raised his 12-month price target for Apple's stock to $202, up from $185, earlier this month. White believes Apple "remains among the most underappreciated stocks in the world," and his bullish price target suggests the company could be valued at a trillion dollars within the next year.


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Apple’s Retail Chief Angela Ahrendts and Top Lawyer Bruce Sewell Each Sell Over $10 Million in Stock

Apple's retail chief Angela Ahrendts and top lawyer Bruce Sewell each sold over $10 million in company stock over the past week, according to a pair of disclosures with the Securities and Exchange Commission.


Pursuant to her trading plan adopted in February, Ahrendts sold 75,000 shares of Apple stock between May 4 and May 8, netting nearly $11.1 million based on the weighted average sale price of the five transactions. Ahrendts still owns 103,116 shares in Apple following the sale, worth nearly $16 million.

Sewell sold 67,500 shares of Apple stock in multiple transactions on May 5, netting just over $10 million based on the weighted average sale price. Sewell still owns 141,325 shares in Apple following the sale, worth nearly $22 million.

Ahrendts has served as Apple's Senior Vice President of Retail since 2014, overseeing the company's physical and online storefronts. Under her leadership, Apple has been renovating several of its stores, partly in an effort to turn them into community gathering places rather than just sales floors.

Sewell has served as Apple's General Counsel since 2009, overseeing all legal matters, including corporate governance, intellectual property, litigation and securities compliance, global security, and privacy. He came into the spotlight last year twice during separate battles with the FBI and Spotify.


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Apple Nears $800 Billion Valuation On Path to Becoming World’s First Trillion Dollar Company

Apple's stock is currently trading above the $150 mark for the first time ever, after factoring in a 7-for-1 split in 2014, giving the company a record-high market cap of nearly $790 billion. That means Apple is just over $200 billion away from becoming the world's first trillion dollar company.


Google Finance shows Apple flirting with the $800 billion mark today, but the tool appears to be overcounting the company's number of outstanding shares, which totaled 5,225,791,000 as of last quarter. Apple's outstanding shares have declined as the company continues its share buyback program.

Apple's stock price will actually need to hit around $153 based on basic outstanding shares, or around $152 based on diluted outstanding shares, for a true $800 billion capitalization. Either way, it's close.

Apple's stock has been on an impressive run since dropping to as low as $89.47 in 2016, when the iPhone maker reported its first decline in annual revenue since 2001, and its first drop in iPhone sales ever.

Apple analyst Brian White of Wall Street investment firm Drexel Hamilton continues to believe Apple "remains among the most underappreciated stocks in the world," with "attractive upside" for investors. White raised his 12-month price target for Apple's stock to $202 today, up from an already bullish $185.

An excerpt from White's research note, distributed today and obtained by MacRumors:
Apple's valuation has been depressed for years as investors grew concerned that Apple would fall victim to the missteps of consumer electronic companies of the past. However, Apple has proven its resilience through its unique ability to develop hardware, software and services that work seamlessly together. We believe this positions Apple very well to capitalize on the trend toward more "things" becoming a computer.
White's price target implies that Apple could become the world's first trillion dollar company within the next year. Apple shares trading for $202 would currently give the company a market cap of around $1.05 trillion.

Over a dozen prominent Wall Street analysts remain upbeat about Apple's stock price heading into the second half of the year, with lots of excitement surrounding the significantly redesigned "iPhone 8" expected to launch in the fall. The smartphone's sales may be boosted by a large "supercycle" of users due to upgrade.

Apple's stock had briefly declined to as low as $144.27 last week after its second quarter earnings results fell slightly below Wall Street expectations, but the drop proved to be only a blip on the radar.


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Apple’s Stock Has Already Bounced Back After Earnings Results Slightly Missed Expectations

Apple's stock has recovered from early week losses incurred after the company's earnings results fell slightly below Wall Street expectations.


Apple shares are currently trading for roughly $148, slightly above Tuesday's closing price of $147.51, set just before the company's earnings report. The stock had dropped to as low as $144.27 on Wednesday, but Apple has bounced back since alongside an overall rise in the S&P 500 index today.

Wall Street remains bullish on Apple heading into the second half of the year, as most analysts think the so-called "iPhone 8" with an OLED display and wireless charging will be a hit among customers. There's also a larger than usual "supercycle" of customers with older iPhone models due to upgrade.

MacRumors obtained research notes from 18 analysts tracking Apple, and 14 of them continue to rate the company's stock as a "buy" or equivalent following the company's second quarter earnings results. All but three analysts believe that Apple's stock price could rise to between $150 and $185.


Apple's stock has been steadily climbing in value since dropping to a 52-week low of $89.47 in 2016, when the iPhone maker reported its first decline in annual revenue since 2001, and its first drop in iPhone sales ever.

AAPL touched $148.20 in intraday trading this morning, a new all-time high. The stock is on pace to top Tuesday's record close of $147.51.

Tag: AAPL

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Apple Analysts Remain Upbeat Ahead of Expected ‘iPhone 8’ Upgrade Supercycle

Apple reported its second quarter earnings results on Tuesday, highlighted by revenue of $52.9 billion and 50.8 million iPhones sold. Apple said the results met or exceeded its own targets and guidance, but some of the numbers fell slightly short of what most financial analysts were expecting.

Nevertheless, the majority of analysts remain bullish on Apple's stock price heading into the second half of the year. MacRumors obtained research notes distributed today by over a dozen analysts, and we've compiled their updated AAPL price estimates and guidance for Apple's current third quarter below.


Katy Huberty of Morgan Stanley is one of several analysts anticipating an "iPhone supercycle" based on high expectations for the "iPhone 8" and a growing base of previous-generation iPhone owners:
We continue to believe that a combination of a growing base of aged iPhones and exciting new technology, including OLED displays, 3D sensors and wireless/fast charging will drive an iPhone supercycle that is still underappreciated by the market.
Rod Hall of JPMorgan rather surprisingly believes there is a "high likelihood" that the iPhone 8 will be announced or at least previewed at WWDC in June, marking the start of "iPhone mania," rather than in September as usual:
We believe there is a high likelihood that the company plans to announce or at least preview the upcoming new iPhone at WWDC which starts on June 5. Given this we would expect a weaker than normal Summer for Apple as consumers await a major product upgrade. […] Given that our numbers remain well above consensus forecasts we would advise investors to continue to stock up on AAPL before iPhone mania kicks off in earnest in early June.
Apple introduced the iPhone 3G, iPhone 3GS, iPhone 4, and iPhone 4s at WWDC, but it broke that trend when it unveiled the iPhone 4s in October 2011, and each new iPhone since has been announced in September. A fall launch positions the iPhone well for the ensuing holiday shopping season.

Apple previewing the iPhone 8 at WWDC is certainly possible, but it doesn't make sense for a few reasons. For one, the smartphone is widely rumored to be facing mass production challenges that could push its wider availability into at least October or November, a whole four to five months after June.

Second, Apple pre-announcing a new iPhone in June would likely hurt its sales during its summer quarter, as some customers might choose to wait until the latest and greatest model is available. Rumors about a new iPhone are one thing, but Apple confirming a new model would be much more influential.

During the company's post-earnings conference call yesterday, Apple CEO Tim Cook surprisingly acknowledged a recent "pause" in iPhone purchases that he believes is due to earlier and more frequent reports about future iPhones.

Indeed, analysts have been looking toward the future, with all eyes set on the iPhone 8. "One more quarter before show time," wrote Steven Milunovich of UBS. "Hit snooze for 90 days," echoed Amit Daryanani of RBC Capital Markets. "Now we wait," said Benjamin Schachter of Macquarie Research.

Tag: AAPL

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Apple Expected to Report Strong Earnings Today, But Unlikely to Set Record-Breaking Quarter

Apple is set to report its earnings results for the second quarter of its 2017 fiscal year at 1:30 p.m. Pacific Time today.

Apple provided the following guidance for its second quarter on January 31:

• revenue between $51.5 billion and $53.5 billion
• gross margin between 38 percent and 39 percent
• operating expenses between $6.5 billion and $6.6 billion
• other income/expense of $400 million
• tax rate of 26 percent

That guidance suggests Apple will report its second-best March quarter earnings results in the company's history:

• Q2 2013: $43.6 billion
• Q2 2014: $45.6 billion
• Q2 2015: $58 billion
• Q2 2016: $50.6 billion
• Q2 2017: $51.5+ billion

Wall Street analysts generally expect Apple to meet the higher end of its guidance, with estimates averaging out to around $53 billion. If accurate, Apple will have grown around four to six percent compared to the year-ago quarter for its second consecutive quarter of growth after an uncharacteristic nine-month skid last year.

MacRumors.com compiled estimates from over a dozen financial institutions and independent firms tracking Apple and the company's stock. The figures are listed below, ranked from highest to lowest in terms of total revenue. The date column reflects when each research note was distributed to clients.


On a category-by-category basis, the highlight of Apple's earnings results will likely be its services, such as the App Store, iTunes, Apple Music, and Apple Pay. Most analysts estimate Apple's services revenue will be up to 20 percent higher, totaling up to $7.3 billion versus $5.9 billion a year ago.


iPhone remains Apple's most important product by a significant margin. Most analysts predict that Apple topped the 51.1 million iPhones it sold in the year-ago quarter, with several estimates coming in above 52 million. However, four analysts expect iPhone sales to decline compared to the year-ago quarter.

iPad unit sales are forecasted to decline to between 7 million and 9.8 million compared to the 10.2 million tablets Apple sold in the year-ago quarter, while Mac sales should remain relatively flat on a year-over-year basis.


Meanwhile, analysts believe Apple Watch sales totaled between 1.6 million and 3 million in the quarter. Apple does not disclose Apple Watch sales in its quarterly earning results, instead grouping the device under its "Other Products" category, alongside iPods, Apple TVs, Beats Electronics, and accessories.

Apple's cash and marketable securities total is projected to have surpassed $250 billion in the second quarter, up from $246.1 billion last quarter. Apple is expected to provide an update about its capital allocation, including dividends and share buybacks, as it usually does at this time of its fiscal year.

Apple CEO Tim Cook and CFO Luca Maestri will discuss the company's financial results on a conference call at 2:00 p.m. Pacific Time. MacRumors.com will transcribe the call as it unfolds for those unable to listen.

Tags: earnings, AAPL

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RBC Raises Price Target on Apple Shortly After Outlining Potential Benefits of a Merger With Disney

RBC Capital Markets raised its AAPL price target to $157 today, up from $155, as it believes iPhone sales were stable to modestly better than expected in Apple's second quarter, which ended on March 31.


The investment bank's lead Apple analyst Amit Daryanani said the company's iPhone mix continues to remain positive, with "more" Plus-sized models sold in the quarter than it previously forecasted. iPhone 7 Plus models carry a $120 premium over iPhone 7 models, contributing to a higher average selling price.

RBC now estimates Apple will report quarterly revenue of $53.5 billion, matching the high end of the company's guidance. Apple is scheduled to report its second quarter earnings results on May 2 at 1:30 p.m. Pacific Time. MacRumors.com will provide live coverage of Apple's conference call at 2:00 p.m. Pacific Time.

The bank said it remains positive about AAPL based on so-called "iPhone 8" refresh cycle tailwinds, benefits from a possible capital allocation increase, the acceleration of its growing Services category, and potential upside from U.S. Donald Trump's political agenda in relation to taxes and cash repatriation.

Apple's stock price has been rising steadily since November, as rumors suggest the company will launch its first iPhone with an OLED display and slim bezels, potentially mirroring the design of Samsung's new Galaxy S8. Many analysts have maintained a "buy" or equivalent rating on AAPL since March or earlier.

Last week, RBC Capital Markets generated headlines when it outlined the potential benefits of a completely speculative Disney acquisition.


In a lengthy research note, the bank said such a deal would create a "tech and media juggernaut like no other" and instantly expand Apple's services, content, and media portfolio. Assets such as ABC and ESPN, for example, could lay the foundation for Apple's long rumored but elusive streaming TV service.

An excerpt from Daryanani's research note obtained by MacRumors:
Together, Apple and Disney would instantly have access to global distribution via Apple's installed base and the global iTunes store, and a massive library of content and studio capacity via Disney to make future movies and shows. A digital content service could be put together in relatively short order. Apple has the advantage of integrating its price to consumers with its hardware. For example, buy a new iPhone and receive a 12-month subscription to the streaming service for free.
Daryanani said the so-called "mega deal" would diversify Apple away from hardware and help the iPhone maker fulfill its goal of doubling its Services category by 2020. He also thinks it would be an appropriate use of Apple's massive cash hoard, should the U.S. ever offer a cash repatriation holiday.
A prerequisite to Apple-Disney is a regulatory environment that would allow Apple to use its huge amount of cash assets for a domestic acquisition. If a cash repatriation tax holiday results in a 9% tax on offshore cash brought to the United States, we estimate that Apple would effectively have access to cash of $223 billion. After adjusting for operational requirements, Apple should have $200 billion cash available for discretionary uses.
Daryanani said there is a "greater than 0%" chance that Apple acquires Disney, but he admitted that the odds are low at this point.

Jim Cramer, host of CNBC's "Mad Money" show, believes the Apple-Disney speculation was more about influencing the stock market than anything else.
"The only thing that's really accomplished by this kind of speculation? The short-sellers will be afraid to bet against Disney's stock because of newfound fears of a takeover lurking. It really does put a bid underneath, simply because it was just too juicy to ignore," Cramer concluded.
AAPL closed at $141.83 on Monday. The Walt Disney Company closed at $113.78.

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Apple’s Stock Soars Past $1,000 Pre-Split Price as Bulls Think ‘Golden Opportunity’ to Buy Remains

AAPL rose over 2 percent on Tuesday to close at $143.80, a new all-time high. The stock also surpassed a per-share price of $1,000 when adjusted for Apple's 7-for-1 stock split in June 2014. Apple now has a market valuation of over $750 billion on its path towards becoming the world's first trillion dollar company.


The milestone comes as longtime Apple analyst turned venture capitalist Gene Munster said now remains a "golden opportunity" to buy Apple stock. Munster said his new firm Loup Ventures has a $180 to $200 price range for AAPL, and he expects "clear sailing" for Apple investors in the months ahead.

Apple analyst Brian White of brokerage firm Drexel Hamilton maintained his "buy" rating for AAPL today, with a price target of $185. He continues to believe that Apple remains "among the most underappreciated stocks in the world" and that "Apple has Samsung on the ropes like never before in recent memory."

An excerpt from White's latest research note obtained by MacRumors:
With Apple operating on all cylinders and a strong iPhone launch expected this fall, combined with the rise of more China-based competitors, we believe the pressure is on Samsung to deliver a strong upgrade without any missteps. We believe if Samsung stumbles again, the company's position in the smartphone market could be permanently impaired.
Apple analyst Steven Milunovich of investment bank UBS has maintained his "buy" rating for AAPL as well, with a price target of $151 set in late February. In a bullish scenario where Apple has "caught the next major trend," he believes the stock's price could reach $200 within the next two years or so.

Apple is widely expected to benefit from another "supercycle" of iPhone upgrades this year, given a "large than ever" base of existing customers with an iPhone 6 or older device. Apple's stock price has also been fueled by excitement surrounding a rumored 5.8-inch iPhone with an edge-to-edge OLED display.


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